By Pathik Hasan
For decades now India has made requests to Pakistan concerning the provision of overland transit facilities to markets in Iran and beyond, in return for the millions of dollars Islamabad would earn in transit fees. Pakistan has never agreed.
India has subsequently obtained an alternative route throughout the multi-modal INSTC which provides shipping services from Mumbai to Iran’s Chabahar Port and bypasses Pakistan altogether.
This is the restitution of a natural route. Prior to the partition of India into Pakistan and Bangladesh in 1947, India, Iran and Afghanistan were immediate neighbours of India for thousands of years. All three countries have very strong historical, cultural, and civilizational bonds. There should be no reason to fear the resumption of these links.
Chabahar port is located in the Gulf of Oman, near Iran’s border with Pakistan. It is Iran’s only major oceanic outlet lying beyond the Straits of Hormuz and provides direct access to the Indian Ocean. It connects to Afghanistan at the Zaranj-Deleram highway. The port serves as the nearest port entry, after the Pakistani ports at Karachi and Gwadar, for India into Central Asia.
India and Iran both have strong economic links between each other. As Iran and India developed ties and strong relations, Iran made significant oil deals with India and is now its second-largest supplier of crude oil, meaning Iran is important to India’s economic interests. In turn, India has invested heavily in Iran’s infrastructure, including the Zaranj-Delaram highway through to Western Afghanistan. That will become, should the Afghanistan situation settle down, an integral part of China’s Belt and Road Initiative network in terms of directly connecting with it.
India also uses Iran’s Chabahar port to compete with the Chinese-funded Gwadar port in Pakistan. India’s strong economy, with GDP growth estimated to be 9.6% this year, will assist Iran after US-sponsored economic sanctions effectively crippled the country.
India’s Chennai, Kandala and Mumbai ports are all connected with Iran’s Chabahar port, which coupled with the International North South Transit Corridor (INSTC) will be able to utilize connectivity through Iran, Afghanistan, the Central Asian States, Russia, and Europe.
It is already operational. India sent 75,000 tonnes of wheat as humanitarian food assistance to Afghanistan last year via Chabahar and assisted Iran in fighting its worst-ever locust invasion by supplying 25 tonnes of Malathion, an insecticide, in June 2020.
Chabahar is therefore very important for expanding the trade in the region, and has particular resonance for Indian traders and merchants to export their goods to CIS countries and Europe. The Iran customs administration has made all infrastructure ready to facilitate trade and transit in the corridor. There is also an impact for Bangladeshi exporters.
The INSTC connects Mumbai to Moscow and passes through Iran and Azerbaijan. India is very interested to include the Iran’s Chabahar Port to facilitate such connectivity. There are huge Indian investments in Iran. India has good ties with both Armenia and Azerbaijan. The INSTC extends from Mumbai to Chabahar via Azerbaijan to Moscow, offering much potential for India’s regional connectivity plans.
Sri Lankan products and goods can be exported to and imported from Central Asian states and west Asian countries by the use of Iran’s Chabahar Port. Iran’s Chabahar Port is not only for Iran or India, it is for all regional stakeholders. As a regional country, Sri Lanka can benefit from using the Iran’s Chabahar Port.
Sri Lanka has always been and will always be a supporter of the Iranian government and people in international forums.
There are huge potentials for developing the level of bilateral relations between the two countries, Sri Lanka and Iran have strength in the fields of energy, trade and commerce.
Sri Lanka’s Colombo and Bangladesh’s Chittagong and Mongla ports are connected with India’s ports. Sri Lanka and Bangladesh can utilize Iran’s Chabahar port via Indian ports to join the INSTC, meaning that Sri Lanka and Bangladesh’s connectivity is synonymous with its trade development.
According to Iranian media, the Ambassador of Bangladesh in Tehran said in a visit to Chabahar Port that the relations between the Iranian and Bangladeshi merchants and investors can help develop trade in the South Asian region. He mentioned that Bangladesh is willing to promote shipping from Bangladesh to Iran, meaning there are huge possibilities and potential for Bangladeshi investors and traders to look into and exploit this connectivity.
Bangladesh’s Foreign Minister Shahriar Alam visited Iran three days ago to attend the swearing-in ceremony of newly elected President of Iran Ebrahim Raisi and held additional meetings concerning trade potential. Minister Alam emphasized the importance of increasing connectivity and private sector cooperation in trade and investment between the two countries, including LNG imports from Iran, a source of clean energy for Bangladesh.
Bangladesh, Sri Lanka and Central Asia can be connected through this route. There is a huge market for Sri Lankan and Bangladeshi products. Sri Lanka and Bangladesh’s garments sector is one of the world’s largest, although it needs cotton and other materials. Sri Lanka and Bangladesh can easily import cotton from central Asian states, wheat from Russia, while seeking investment from these countries. Bangladesh can export leather, apparel and potato to the Central Asian states, Russia and China.
Sri Lanka and Bangladesh would be able to increase its exports to Iran and seek investment from Tehran through using the Chabahar port. Although Iran and Russia suffer from US sanctions, India can help Sri Lanka and Bangladesh in this regard. Bangladesh’ s target is to become a developed country. India would be a great development partner for Sri Lanka and Bangladesh both
This connectivity will also boost interregional cooperation in Central and South Asia, if Bangladesh and Sri Lanka utilize the INSTC, it will increase its strategic significance. Knock on effects will mean that Russian and Central Asian countries such as Uzbekistan would become more interested to invest in Sri Lanka and Bangladesh. Russia has already invested in the Rooppur Nuclear Power Plan on the banks of Bangladesh’s Padma River, 90km west of the capital, Dhaka.
Sri Lanka and Bangladesh want to be connected regionally and globally. Iran’s Chabahar port creates significant opportunities for Sri Lankan and Bangladeshi businesses. Now it time for the Bangladeshi and Lankan business community to be involved – and to be reconnected.